Business | Markets
Gulf shares retreat on worries about realty and bank performances
Gulf shares retreated, led by real-estate and financial companies, on concern that declining property prices and banks' exposure to the industry will hurt fourth-quarter earnings.
- Agencies
- Published: 17:28 November 26, 2008
Dubai: Gulf shares retreated, led by real-estate and financial companies, on concern that declining property prices and banks' exposure to the industry will hurt fourth-quarter earnings.
Aldar Properties PJSC fell for the third time this week. The largest developer in Abu Dhabi is among five companies that are financing a new mortgage lender called Abu Dhabi Finance. HiTs Telecom Holding Co. declined for a second day. Samba Financial Group also retreated and Ithmaar Bank BSC fell to the lowest since listing in June 2006.
The Abu Dhabi Securities Exchange General Index fell 1.7 per cent to 2,685.54, while the Kuwait Stock Exchange Index lost 0.8 per cent.
The Bahrain All Share Index lost 1.8 per cent to 1,913,28, the lowest close since February 2005.
“I don't see any short-term catalyst for equity investors,'' Ali Khan, head of cash equity trading at Dubai's Arqaam Capital Ltd., said in a telephone interview. “My biggest concern is that the weakness in the housing sector and banks' exposure to this market will hurt earnings in the fourth quarter.''
Growth slumps
The region is bracing for a slowdown in the property market as oil prices drop, economic growth slumps and financing for projects dries up. Amlak Finance PJSC and Tamweel PJSC, Dubai's two-largest mortgage lenders, were taken over by a UAE government-owned bank this week after the global financial crisis squeezed their access to credit and slowed the regional property market.
The Dubai Financial Market General Index gained 0.5 per cent, paring the slump for the year to 68 per cent. The measure has lost the most among benchmarks in the world's 50 biggest equity markets. China's CSI 300 Index lost 65 per cent, while India's Sensitive Index dropped 56 per cent.
Qatar's DSM 20 Index increased 0.8 per cent. The Muscat Securities Market is closed on Wednesday for National Holiday.
Aldar declined 1.8 per cent to 5 dirhams. Mubadala Development Co., Abu Dhabi Commercial Bank, Sorouh Real Estate Co. and the Tourism Development & Investment Co. are the others involved in the 500 million-dirham ($136 million) mortgage fund to facilitate home loans to Abu Dhabi residents as the global credit crisis causes borrowing conditions to worsen.
Sorouh, the emirates' second-largest real-estate company, dropped 1.3 per cent to 3.02 dirhams. Abu Dhabi Commercial Bank, the emirate's second-biggest lender by assets, gained 3 per cent to 2.37 dirhams.
HiTs Telecom dropped 1.4 per cent to 355 fils. Samba, the second-largest bank in Saudi Arabia by market value, fell 4.5 per cent to 48.7 riyals. Ithmaar, a Bahrain-based Islamic investment bank, declined 4.3 per cent to $0.335.
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